Belarusian Innovation Fund

Report
Vladimir Nedzilko
Support for innovation
activities by the Belarusian
Innovation Fund
Belinfund: Setting up
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The task of establishing a new funding mechanism and
developing of an integrated system of measures to encourage
and support domestic producers has been was solved partly
through the setting up of a national fund for special purposes
– the Belarusian Innovation Fund. Its main goal is to provide a
support for innovative productions.
Belinfund was founded in 1998, by the Regulation of the
Council of Ministers of the Republic of Belarus №1739 to
strengthen the public support for innovation. It is a public nonprofit organization.
The activities are carried out in the form of financial support to
implementation of innovative projects, analysis of the results
of S&T programs, selection of best and promising
developments. BelInFund presents just one of the forms of
the public support to innovation activities in Belarus.
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Belinfund: the order of providing a
financial support
50%
Belinfund
Innovative
Project (IP)
Result
50%
IP Executer
IP State
Customer
Repayment
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Transition towards activities on
mastering of the innovative productions
The transition
period lasted
from 2005 to
2008
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The new financing scheme
STATE PROGRAMS, INNOVATIVE PROJECTS
Research
State budget
Innovation funds
(3%)
Development
Belin
fund
Setting up and
mastering of a
production
Repayment
Other sources
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Public Corporation “Gorizont”
Setting up a production of house-hold technique
“Gorizont-midea”
Funding:
• 14 494,0 mln BYR Belinfund
• 7 111,0 mln BYR Innovation Fund of the Ministry of
Industry
• 6 617,0 mln BYR Public Corporation “Gorizont”
A new production of house-hold technique has been set up
(46 varieties of microwave ovens). More than 360 thous
ovens for over 47.0 bln BYR produced. 269 new jobs
created. The ratio of Belinfund spendings to the is 1:3.2
(for 2008-2010).
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Production of house-hold technique
“Gorizont-midea” (microwave ovens)
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Scientific Production Republican Unitary
Enterprise “UNIHIMPROM BSU”
Developing a technology for producing the biodiesel
from rapeseed oil, creating an installation for
producing the biofuels
Funding 996.0 mln BYR Belinfund
 1002.0 mln BYR own funds
By the end of 2009, the Public Corporation “Grodno-Azot"
produced 10.14 thous tons of fatty acids methyl esters and
247.73 thous tons of mixed fuel using the installation.
At the installation at the Public Corpporation
“Khimvolokno”, Mogilev developed by "Unihimprom BSU”
8.8 thous tons of fatty acids methyl esters and 264.0 thous
tons of mixed fuel have been produced.
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Installation for industrial producing of biofuels
from rapeseed oil (PC “Grodno-Azot”, Grodno)
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Scientific Production Private Unitary
Enterprise “ADANI”, Minsk
Digital x-ray mammography
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Advantages of being supported
by Belinfund
Time frame to use the financial
support – up to 5 years
 Repayment is calculated using 0,5
refinancing rate
 Delay in the payment of interest and
principal debt;
 The absence of mortgage and
insurance
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Challenges
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Lack of opportunities to support high-risk
projects;
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Complicated system of selection and
approval of innovative projects; state
customer is obligatory;

Belinfund is not able to form its own funds;

The only source of funding is the budget
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Decree № 252 of 17.05.2010 “On amendments
and changes in some decrees of the President of
the Republic of Belarus”
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The Decree regulates the activities of venture capital organizations,
gives a definition of a "venture project" and "venture capital
organization”, establishes a system of incentives to encourage
venture businesses.
The developing of initial stages of the venture investment system in
Belarus is carried out by Belinfund. It has been entrusted
additionally with a function of a venture capital firm in terms of
supporting financially the venture projects.
Belinfund supports the venture projects in high technology and
knowledge-intensive industries. Projects must have a high economic
and innovation efficiency and sustainable competitive advantages
ensured by the techno-economic parameters of the created products
and technologies compared to the analogues.
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Venture capital financial mechanism
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The difference between Belinfund and the
existing world practice is that the financing of the
projects is not shared but is carried out in the
form of a discounted loan.
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Belinfund may buy shares of an innovative
company as a collateral for a loan.
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After the repayment of a loan, an innovative
company can buy the embodied shares from
BelInFund.
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Venture financing scheme
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Providing the budget funds on the basis of
repayment
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Buying the shares of an innovative
company (using the other sources than the
budget)
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Criteria for selection of venture projects
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Demand for the product in the internal and/or external market;
Protected intellectual property rights;
Possibility for commercialization and the start of a production and sales
(services) in a relatively short time-not more than 3 years;
Possibility to split the financing of a project into stages and define intervals
in which decision about the further funding is to be taken;
Potential target market should be 300 bln BYR/year (ar 100 mln USD/Year)
Opportunity to exit a project (to sell Belinfund’s /venture capital
organization’s shares in the innovative company) in a few years;
IRR no less than 40% during the funding period;
The investment/project - up to 5 bln BYR (ar 1.5 mln USD);
Organizational and manufacturing capacity and qualified team for the needs
of a project;
The co-funding of a project from own funds and other sources for at least
50% of the project cost.
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Tax benefits within venture projects
implementation
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Venture organizations and Belinfund are
exempted from payment of interest tax on the
income they have received from innovative
organizations as an interest generated from the
use of venture funds, as well as dividends and
similar income.
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Obtained additional funds will be used for
financing the new venture capital projects,
creating the new innovative companies and
other activities.
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Venture Company “EurAsEC Center of
Innovative Technologies”,
Limited Liability Corporation
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Russian Venture Company, Russia
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National Agency for Technological
Development, Kazakhstan
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Belinfund, Belarus
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Venture Company “EurAsEC Center of
Innovative Technologies”, Limited
Liability Corporation (VC CIT EurAsEC)
Rules for setting up:
 Registration of VC CIT EurAsEC in Russian jurisdiction
 Management: Board of Directors, Management Board of the
company;
 Contributions by Parties - 30.0 mln RUB each;
 Definition of Parties’ shares and face value;
 Development of internal documents:
 final version of the Charter;
 regulations on the Board of Directors and Investment
Committee;
 other
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Thank you for attention!
Belarusian Innovation Fund
31A-403 Khoruzhej str.
220002 Minsk
BELARUS
Tel/fax +375 17 2931781
e-mail: [email protected]
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